How will SEC charges against Terraform Labs affect LUNC and other cryptos

ambcrypto.com:

The FTX controversy and the Terraform catastrophe rocked the entire crypto sector to its foundations. The SEC recently disclosed that it was suing Terraform Labs and Do Kwon.

Is this new information affecting the struggling USTC and LUNC in any way? In addition, could the outcome of this recent litigation have repercussions for other cryptocurrencies?

Read Terra Luna Classic [LUNC] Price Prediction 2023-24

The Security Exchange Commission (SEC) announced fraud charges against Do Kwon and Terraform Labs in a blog post dated 16 February.

Do Kwon is accused by the SEC of masterminding a multibillion-dollar fraud, as detailed in the suit. The complaint also made clear that the SEC deemed Luna (LUNC) Terra USD (UST) to be a security.

While the SEC has taken firm action against Terraform and its co-founder for fraud, its stance on LUNC and USTC has sparked concerns about setting a dangerous precedent for other cryptocurrencies.

After the UST lost its peg in 2021, Terraform was accused of manipulating the peg by having a third party purchase the asset. In addition, the lawsuit hinged on the central argument that UST is security due to its ties to Anchor.

This part of the suit could have implications for other cryptocurrencies. Based on the SEC’s findings, USTC and LUNC are considered unregistered securities. This is because Anchor was promoted as a lucrative investment opportunity.

Even if it’s about time that Terraform and Do Kwon were sued, the SEC’s efforts to classify LUNC and USTC as securities have left the cryptocurrency industry in a bind.

T he SEC’s case against Ripple and XRP boils down to this: XRP is a security, and a victory against Terraform might give the SEC a precedent, a dangerous one at that, to use